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http://www.ft.com/cms/s/0/7b9a25ba-410e-11e1-8c33-00144feab49a.html#ixzz1jn1sltrY
China’s city population outstrips countrysideBy Jamil Anderlini in Beijing
More Chinese citizens live in cities than in the countryside for the first time ever, attracted by job opportunites in the country’s rapidly growing urban areas.
On Tuesday, Beijing said the country’s gross domestic product grew 8.9 per centin the fourth quarter of 2011 from the same period a year earlier, the slowest pace in more than two years but only moderately slower than previous quarters.
The historic population milestone, reached by UK and US in 1851 and 1920 respectively, was marked by a single sentence buried in a government press release on the country’s quarterly economic performance. According to the figures, 51.27 per cent of China’s population, or 691m people, were living in urban areas by the end of last year, up from 49.95 per cent at the end of 2010.
The UN estimates that the global urban population exceeded that of rural areas in 2008, thanks largely to the frantic pace of urbanisation in China.
As recently as 1980, less than 20 per cent of China’s population lived in cities. While analysts predict that 70 per cent of China’s population – or roughly 1bn people – will be living in urban areas by 2030, the country’s urbanisation process has been uneven and is dependent on rapid growth in the overall economy.
“The speed of urbanisation depends on people having something to do in the cities,” said Tom Miller, managing editor of China Economic Quarterly and author of a forthcoming book titled China’s Urban Billion. “If economic growth isn’t there then there won’t be jobs for people to go to in the cities and they won’t go.”
In early 2009, as many as 25m rural migrant labourers gave up looking for work and returned to the countryside in the midst of the global financial crisis and a precipitous drop in Chinese exports. Most of them have since returned to urban factories, restaurants and construction sites, but another economic slowdown could send them home again.
Many migrants working in urban areas retain the agricultural land use rights allotted to them by the government as a safety net. According to Mr Miller, official surveys show three-quarters of peasant farmers do not want to give up their rural status for the city if it means having to renounce their land rights.
On Tuesday Ma Jiantang, spokesman for China’s National Bureau of Statistics, warned that China faced a “gloomy, highly complicated and severe international environment” this year due to “sluggishness in the main developed economies”.
Another concern for China’s economy is the domestic real estate market, which has been one of the main drivers of growth for the last decade.
“The property market correction is providing the greatest downside momentum, with still-tight credit conditions choking activity in the broader economy and the precarious eurozone providing plenty of drag,” said Alistair Thornton, an analyst at IHS Global Insight in Beijing. “The worst is still to come, with GDP growth likely to sink over a percentage point lower this quarter.”
On Tuesday the World Bank warned developing countries that they should be prepared for a global economic meltdown on a par with 2008-09 if the European sovereign debt crisis escalates.
Many economists believe China’s labour force has already started to decline, and predict that an ageing population and a slower pace of urbanisation will lower the potential growth rate in the world’s second largest economy.
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